Shiba Inu (SHIB) fans and investors have long pursued the “one-cent” dream. The asset’s price has to rally by around 82069.27% to hit the $0.01 target. While the gains needed to hit the $0.01 target may seem significantly large, it is not something that SHIB has not done in the past. SHIB’s price rallied by several million percentage points within its first year of launch. Despite having displayed incredible growth in the past, hitting the $0.01 mark may not be realistic. Let’s discuss why.
Why Shiba Inu’s 1-Cent Dream May Not Become A Reality
One major reason why SHIB may never hit $0.01 is its massive circulating supply. There are nearly 589 trillion SHIB coins in circulation right now. If the price of each coin hits $0.01, the project’s market cap will reach $5.89 trillion. This figure is larger than the GDP of most countries. It is highly unlikely that Shiba Inu’s market cap will hit the $5 trillion mark.
The most significant catalyst for SHIB’s incredible 2021 rally was Vitalik Buterin’s massive token burn. Buterin received about 500 trillion SHIB tokens upon the project’s launch. The Ethereum founder decided to burn 90% of the coins he received. This caused a massive dip in supply. The lowered supply and high demand caused SHIB’s price to skyrocket.
Can The Project Undertake Another Big Burn?
Shiba Inu already has a burn mechanism in place. While the number of tokens is gradually decreasing, the rate of destruction is substantially lower than what is needed for the coin to hit $0.01.
Lead developer Shytoshi Kusama also highlighted how burns alone will not lead to higher prices. The coin needs to have substantial demand as well.
Also Read: Shiba Inu: 2 Realistic Price Levels SHIB Could Hit By 2030
The Shiba Inu team is working on a new burn mechanism as we speak. Despite reports of the new burn mechanism being able to destroy trillions of coins yearly, we do not have official word on how it may work. We could hit the $0.01 mark if Shiba Inu can drastically reduce its supply.
Credit: Source link
